Which of the Following Is a Requirement for Development

question 5

Multiple Choice

Which of the following is a requirement for development?  

• A) an unreliable system of financial institutions 
• B) a lack of saving by households and firms 
• C) low confidence in domestic currency 
• D) low and predictable inflation that encourages saving

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Definitions:

Efficient Markets Hypothesis

The theory that all available information is already reflected in stock prices, implying that it is impossible to consistently achieve higher returns.

Semistrong-Form

A theory related to the Efficient Market Hypothesis that asserts all public information is already reflected in stock prices, along with historical information.

Weak-Form

In finance, a hypothesis suggesting that past stock prices and volumes are not predictive of future stock prices.

Weak Form

Assumes that all information contained in past price movements is fully reflected in current market prices. Thus, information about recent trends in a stock’s price is of no use in selecting a stock.